Draft RES Directive some sticking points Jaap Jansen

Draft RES Directive: some sticking points Jaap Jansen www. ecn. nl CEPS/ECN Workshop, Brussels, 13 May 2008

The Commission deserves a lot of credits • Promotion of a well-functioning single E market • Promotion of a sustainable environment (EU ETS, etc. ) • Preparing last 23 January’s package >> Yet … the EU policy framework for RES promotion is a rather tedious subject

Draft RES Dir: three sticking points • The choice of a new energy numéraire • Ensuring reliable accounting and sustainability • Guarantees of Origin (Go. O)

New numéraire: final energy consumption • Relative weights of apples and oranges • The use of renewable substitutes in industrial feedstock neglected

Renewables: proper accountancy and sustainability • Renewables a 100+ billion €/y business in the EU • Renewable feature good for tens of billion €/y !!! • Guarantees of Origin (Go. O) to cover total quantity of final renewables consumption completely ‑ Ensuring reliable accounting of RES ‑ Ensuring sustainability of RES supply chain • Go. O for (imported) biofuels to be urgently considered

What is a Go. O? RES-E Directive 2001/77/EC Internal market perspective E-M Directive 2003/54/EC • To promote trade in RES-E • To reliably verify info for transparency of the consumer’s choice Draft RES Dir. : Environmental protection perspective • Tool for national support schemes • Tool for state trade for “smooth” target accounting

Proposed Go. O regulation: some issues • Redemption after one single use OK !!! • Yet flexibility mechanism efficient and transparent? ? ? • Intervention bias pro new installations Treaty compatible? ? ? • Are consumer concerns addressed at all? ? ? • Lock-in at first cash-in of support benefits ? ? ? • Compliance sanction? ? ? >> Rigorous redrafting needed

Just a few suggested amendments (I) • A Go. O is a unique (or at least leading) proof of origin attributes it specifies of the underlying specific quantity of energy: e. g. ‑ (Renewable) energy source ‑ Production location ‑ Production (or issuing) date ‑ Sustainability OK (whole supply chain) ‑ Date installation entered on line • Go. O regulation in realm of internal market rules for all uses but one

Some suggested amendments (II) • Exception use: application for benefits of a national support scheme • Regulation on national support schemes ringfenced under Env. Protection State Aid rules • NO automatic right to use an imported Go. O for • • benefits of a national support scheme Only yes for Go. O origin/schemes within joint support scheme bubble Prior fiat Commission needed to start bubble

Thank you j. jansen@ecn. nl